Johnson, Inc. has a current ratio of 1.7. Thompson Industries has a current ratio of 22. Which of the following is true? a. Johnson has less cash than Thompson. b. Thompson has more inventory than Johnson. c. Both of the above must be true. d. Neither of the above necessarily is true.

Johnson, Inc. has a current ratio of 1.7. Thompson Industries has a current ratio of 22. Which of the following is true? a. Johnson has less cash than Thompson. b. Thompson has more inventory than Johnson. c. Both of the above must be true. d. Neither of the above necessarily is true.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

42. Johnson, Inc. has a current ratio of 1.7. Thompson Industries has a current
ratio of 2.2. Which of the following is true?
a. Johnson has less cash than Thompson.
b. Thompson has more inventory than Johnson.
c. Both of the above must be true.
d. Neither of the above necessarily is true.

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